Euroclear has introduced a digital securities issuance service and successfully settled a 100 million euro ($106 million) digital World Bank bond. This heralds the commencement of the Brussels-based settlement house’s digital infrastructure strategy.
The three-year bond, labeled as a digitally native note, has been issued by the World Bank’s lending arm, the International Bank for Reconstruction and Development, with the goal of raising funds for sustainable development. This bond has found its listing on the Luxembourg Stock Exchange, with the transaction concluded on October 23.
Euroclear’s digital infrastructure seamlessly integrates with its conventional platform for secondary operations, in full compliance with the regulations set forth by the European Union’s Central Securities Depositories Regulation. This system operates on R3’s cutting-edge Corda blockchain technology. Anshula Kant, the World Bank Group’s Managing Director and Chief Financial Officer, underlines the ongoing transition to digitalization in capital markets, citing Euroclear’s new service as a pivotal step in this transformative journey.
It’s worth noting that this issuance has been settled under English law. Citi Issuer Services has played a vital role as the issuing and paying agent, with TD Securities acting as the issuer agent. Euroclear, a prominent player in the realm of securities settlement houses, is joining the ranks of a growing number of pioneers in this domain.
In 2018, the World Bank set the precedent by issuing the world’s first digital bond. This year alone, we’ve witnessed the issuance of digitalized bonds in Hong Kong dollars and Chinese yuan. Notably, the Luxembourg Stock Exchange recorded its first digital bond, denominated in Swedish krona, back in June.
Further afield, the Tel Aviv Stock Exchange conducted a successful proof-of-concept for the tokenization of bonds in June. Additionally, DTCC, a significant settlement house, recently made waves by acquiring digital infrastructure developer Securrency on October 19, positioning itself as a leader in unlocking the potential of digital assets.
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